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Natural gas tumbles on forecast for warmer weather

Published 10/28/2013, 11:52 AM
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Investing.com - Natural gas prices fell sharply on Monday, as the demand outlook for the home heating fuel was hit by forecasts for warmer weather in the Midwest and Eastern U.S.

On the New York Mercantile Exchange, natural gas futures for delivery in December traded at USD3.674 per million British thermal units during U.S. trading, tumbling 3.63%.

The commodity hit a session low of USD3.667 and a high of USD3.787.
The December contract settled up 1.84% at USD3.812 per million British thermal units on Friday.

Weather forecasts for the next six to 10 days show that only a few days of cooler weather are expected in the Midwest and Eastern U.S., with warmer than normal temperatures expected at the start and end of the forecast window.

Concerns over a slowdown in demand came after data last week indicated that gas inventories are climbing back toward the record levels seen at the start of last winter.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the week ended Oct. 18 rose by 87 billion cubic feet, above forecasts for an increase of 79 billion cubic feet.

Inventories increased by 54 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a build of 75 billion cubic feet.

Total U.S. natural gas storage stood at 3.741 trillion cubic feet. Stocks were 92 billion cubic feet less than last year at this time and 77 billion cubic feet above the five-year average of 3.664 trillion cubic feet for this time of year.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in December were up 0.55% to USD98.40 a barrel, while heating oil futures for December delivery were up 1.62% to trade at USD2.9570 per gallon.



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